Soaring fuel costs changing how we spend our money
Bay retailers report tough times but they may be faring better than other regions
New consumer data reveals the impact soaring fuel prices are having on spending habits, a retail boss says.
Stats NZ retail electronic card transactions for the March 2022 quarter showed national spending on fuel jumped $44 million — up 2.7 per cent compared with the December quarter.
New data released by Worldline NZ also showed consumer spending last month reached $188m in the Bay of Plenty, up 3.8 per cent on last year — and up 18.1 per cent on 2019.
Retail NZ chief executive Greg Harford said the rising cost of fuel likely contributed to the small increase in spending in the Bay of Plenty.
“While feedback from Bay of Plenty members is that it is tough out there, it could indicate that Bay businesses are in slightly better shape compared to other regions.
“Some of that will be driven by travellers, particularly with two long weekends in June but a good part of it will likely be driven by higher spending on fuel.”
Harford said spending overall was slightly down nationally compared to last year but the amount spent on fuel was up “significantly”.
“This reflects the high price of petrol at the moment but also suggests that consumers are reprioritising their spend to take account of this. “Unfortunately, this does add extra pressure to other parts of the retail sector.” Yesterday, fuel price tracking app Gaspy showed most petrol stations in Tauranga charged more than $3 per litre for 91 octane. Tauranga-based Bay Financial Mentors general manager Shirley Mccombe said the cost of fuel was affecting everyone. “Many of our clients can’t afford a vehicle and those who do often struggle to afford fuel.” Mccombe said people were reducing travel or putting in the minimum amount of fuel to get where they were going.
“We often have clients who cannot attend appointments because they can’t afford fuel. “It has a profound effect on those who have reduced mobility, such as our older clients or those living with a disability.
“They often struggle with public transport and rely on their vehicles to be able to shop and attend appointments.”
Mccombe said the impact of fuel affected many other areas, such as the cost of transporting food to supermarkets.
Rotorua Budget Advisory Services manager Pakanui Tuhura said the impact of fuel costs depended on where people lived, where they worked and where their children’s schools were.
Rising fuel prices would likely hit people’s pockets harder in Kawerau with its dependence on forestry and
milling, and Tauranga where people tended to live further from their workplaces.
Tuhura said people were also getting less food for the money they spent.
“People were using debt to cover the increasing food cost. Now they are trying to repay the debt incurred.
“People don’t seem to be changing their retail shopping habits here in Rotorua except they are doing more shopping around for bargains.”
Nationally, consumer spending through core retail merchants excluding hospitality in Worldline NZ’S payments network reached $2.76 billion in June 2022, up just 1 per cent on June last year.
Worldline’s head of data George Putnam said while national spending was higher than last year, the rate of spending growth was well below the latest reported annual inflation rate of 6.9 per cent.
The figures point to the slowness of the current economy, he said.
“With spending lifting only marginally above year-ago levels while inflation is running somewhat higher, it suggests people are having to cut back on the amount they purchase.”
Putnam said the first Matariki long weekend on June 24-26 provided a welcome boost to regional cafes, restaurants, hotels and motels.
Spending reached $112m — up 0.9 per cent on the same non-holiday Friday to Sunday of 2021 and 12.8 per cent on the same weekend in 2019.